Real Estate Land

British Land Share Price Up On £184m Retail Property Investment

**British Land Steps in as Wereldhave Exits UK Property Market**

The British Land Company plc (LON:BLND) share price advanced modestly today after the FTSE 100 company announced on 11 February 2013 a major property investment. The UK’s second-largest property firm by market value is buying a portfolio of retail assets, including a London shopping centre, in a £184-million deal which marks a progression in the real estate investment trust’s stated target of becoming more specialised in retail and London office properties.

The portfolio was purchased from Dutch investment firm Wereldhave (AMS:WHA) which is taking a £13 million loss on the sale of the properties. The Dutch group, whose chief executive resigned last year after a profit warning, is in the process of exiting the UK real estate sector a month after its withdrawal from the US market. As reported by iNVEZZ in January (Dutch Property Fund Wereldhave Completes US Exit), Wereldhave has sold its entire American property portfolio to private equity firm Lone Star Funds for $720 million (£461 million).

**Property Investment Bets on Ealing Shoppers**
The portfolio purchased by British Land yesterday includes five retail and office properties in Baker Street, Chiswick High Road, Putney High Street Fulham Road and Great Portland Street, bought for £41.3 million in total and producing a net initial yield of 5.0 per cent, rising to 6.1 per cent when fully let.

The centrepiece of the portfolio though is Ealing Broadway Shopping Centre — a 300,000 square feet mall with 800 car parking spaces and a multi-let office complex, situated close to one of the stations being constructed for the Crossrail route. The shopping centre was recently refurbished and has around 60 retail units.
British Land’s head of retail, Charles Maudsley, said that the Ealing mall “meets the needs of today’s consumers for convenient, well-located shopping”. Maudsley added that the shopping centre “dominates” the retail offerings in the town centre with an annual footfall of around 15 million. Of the 1.6 million Londoners living in the area, over a third are in the key retail spending group of 25-44 year olds, Maudsley further noted.

**“Significant Opportunities to Grow and Develop” Ealing Mall**
Ealing’s shopping centre has recently come up against competition from Westfield London in Shepherd’s Bush. But when Crossrail is completed in 2018, Ealing will be just 13 minutes from Heathrow, 19 minutes from Liverpool Street and 26 minutes from Canary Wharf, which according to British Land will greatly enhance the worth of the property. The mall is almost 30 years old and its new owner also thinks that the deal will unlock redevelopment potential.
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British Land’s Maudsley elaborated on the rationale for the REITs latest retail property investment: “We believe there are significant opportunities to grow and develop the shopping centre as a retail destination both as we further improve the retail mix and increase the leisure offer and as the area benefits from residential development and the completion of Crossrail.”
**British Land Share Price Climbs**
Following the announcement of British Land’s latest property investment, the company’s stock climbed modestly on the London Stock Exchange (LSE). As of 12 February 2013, 11:03 GMT, British Land was trading at $574.50, or 0.70 percent up from yesterday’s closing level of £571.00 and 1.87 percent up from Friday’s close.

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